Dairy Prices have fallen significantly in the latest Global Dairy Trade auction overnight, with a 3.6 per cent drop across the board. It is the third consecutive fall, with overall and WMP prices down a combined 5.4% and 7.8% over this period, respectively. The biggest slide came from whole milk powder which has the biggest influence on Fonterra’s farmgate milk price – it fell 4.4 per cent to an average US$4207/MT. Prices hit a record peak on March 1 and despite today’s decline WMP prices still sit 13% higher than as at the end of 2021.

  • Anhydrous milk fat dow 1.3% to $US6,802 per metric tonne
  • Butter – dropped 3.7 per cent to a record $US6,640
  • Cheddar down 3.9% $US 6,185
  • Lactose down 2.4% to $1,565
    And the powders
  • Skim Milk up 4.2% to $US 4,408
  • Whole Milk dropped 4.4% in US$ terms is $ 4,207 per metric tonne … it has dipped 8% in the past two auctions.

This result was in line with expectations as prior to the auction, the futures market predicted a 4% fall in WMP prices. The volume of product traded was 22,179 Metric Tonnes. Westpac Agri Economist Nathan Penny expects this price weakness to be temporary, putting it down to China current Omicron issues which will eventually pass. He says Westpac will stick with its $9.60/kg and $9.25/ kg farmgate milk price forecasts for 2021/22 and 2022/23, respectively Fonterra’s forecast farmgate milk price range midpoint is also $9.60 per kg, which would be the highest ever paid.